(7b) Carbon Tax Impact on Ethylene Plants

When governments start charging for every pound of carbon dioxide emitted, how will that affect the ethylene industry? That is more than idle speculation. Canada has already enacted carbon price legislation that effectively puts a tax on carbon dioxide emitted during the production of materials. The European Union is putting in a cap-and-trade system for certain products that will have the same impact as a carbon tax. Even if Washington does not add a carbon tax, every ethylene plant doing business in areas with such a tax will need to be cognizant of the implications of its carbon dioxide emissions on the final price of its products.

To put the issue in perspective, the paper will estimate the taxes using current Canadian regulations and speculate where carbon taxes worldwide are heading in the future. The impact of the carbon price on US ethylene producers will be discussed. Various methods of reducing the carbon tax will be examined using currently available technologies. Finally, a vision of the future of carbon taxes on ethylene producers will be shared.